The entire drive for phone development these days is cost. The short of it is, Apple didn't use cost as a criteria. They did, however, lock buyers into the iPhone only and AT&T only for two years with an equally high cost plan to hide the true cost of the thing.
Then, they did what Apple does best - hype up the marketplace with advertising. They sold a ton early on and so were able to cover the high cost of the early units with their scheme and then could figure out a way to cost-improve it, whilst performance improving it, *and* at the same time they continued to hype the thing up.
There were some unhappy folks out of that first lot to buy into the thing, but now it's not a bad deal at all.
My own radio performance testing of the original iPhone showed it to be mediocre. The stories out of AT&T regarding warranty costs from that fragile screen were like watching a horror film. And, we thought we had problems with our own smartphone screens breaking way too much. You really need one of those rubber super-covers on the iPhone from the moment you pull it out of the box, and then you stand a good chance of it surviving until obsolesence.
Anyway, our primary drive for anything we developed was cost, cost, cost. The features always came in second and the performance third. It wasn't just us, either. The whole industry is so driven.
In the face of the iPhone our leaders figured to dump Symbian and go Windows-based for the smartphones, but that seemingly didn't work. Now, they've jumped onto the Android bandwagon. The scheme was to put half of the Raleigh R&D shop out the door and convert the other half into the Windows-based smartphone R&D shop. That was in late 2008. Now, they've given up and they're turning off the lights here in another month. I guess that says that the Windows-based smartphone didn't work out, either. The California group is doing the Android stuff at this point.
I think they're probably right, too, even though I hate it that they're completely gone from around here. It looks to me like Android is going to be 'it' for a while and probably push past Apple given the number of competitors that are switching to it. I know if I were going to dump my ancient P910a for a new smartphone, I'd go with an Android-based unit. Android is an open system and Apple is closed, and that alone would do it for me.
And, so there you have it. Everyone else *is* doing something in response to the iPhone. The reality is that it takes two years or more to (a) get over the shock of something that comes out of left field, (b) figure out what in heck it was they did, (c) figure out something else to do that isn't just copying, and (d) develop whatever that is and get it into the marketplace.
Fortunately, I'm out of that crazy world. Maybe. I might get sucked back in with RIM (Blackberry) opening an R&D center here and looking to pick up all the ex-Ericsson/Sony Ericsson folks.....